Consumer Code responds to private estate management arrangements consultation

The Consumer Code for Home Builders has formally responded to the Government’s consultation on Reducing the Prevalence of Private Estate Management Arrangements.

The consultation considers the impact of unadopted amenities on privately managed housing estates in England. This can include roads, parks and green spaces, drainage, and other infrastructure which would typically be provided by public authorities. However, in many new housing estates, these charges fall to residents, usually through a management company. 

Although the consultation goes beyond the scope of the Code, there are some areas of overlap, and home buyers have raised disputes through our Independent Dispute Resolution Scheme relating to management arrangements.

The role of code schemes

In our response, we welcome the Government’s commitment to tackling the consumer detriment which can be associated with private management arrangements. In response to suggestions that a code of practice could form part of new proposals, we have highlighted that several codes of practice already exist in the homes and property sector which are approved by the Chartered Trading Standards Institute through their Approved Codes Scheme.

Codes in the new homes sector are already currently aligned to offer buyers the same (or very similar) protection regardless of the builder they purchase from. This includes ensuring buyers are informed about any management fees or other costs associated with the property. We therefore propose that any new code that may be introduced should:

• build upon and/or strengthen existing codes. Adding further codes may lead to confusion and/or gaps in protection
• take account of what is currently working well and retain good practice
• be accredited through the Chartered Trading Standards Institute’s Approved Codes Scheme.

Compliance and enforcement

Our response also highlights the need for compliance checks and adequately resourced enforcement for any proposals to be implemented effectively. This could be light touch through a code of practice and compliance monitoring, or more rigorous using fines/sanctions. Either way, appropriate resources, structure and regulatory controls will be required. 

Noel Hunter, Chair, Consumer Code for Home Builders, said:

“I am encouraged that the government is starting work on proposals that could reduce the potential for consumer detriment through private estate management arrangements. It is important, however, that any reforms build on existing good practice, both within the second-hand homes market and within the new homes market as demonstrated by the Chartered Trading Standards Institute’s Approved Codes Scheme.

“We strongly believe this alignment will help avoid confusion for businesses and consumers and ensure that no individual unintentionally falls through any cracks in the consumer protection available.”